Rethinking Seattle's Transportation Funding: The Rational Case for Builder Impact Fees

"Balancing Growth: The Case for Implementing Transportation Impact Fees in Seattle"

The fundamental principle that growth should bear its own costs is at the forefront of a proposal to grant the future Seattle City Council the authority to impose impact fees on new developments, specifically to fund crucial transportation improvements. As the potential renewal of the nine-year Seattle transportation property tax levy looms on next year's ballot, with a projected cost exceeding $1 billion, there is a pressing need to alleviate the financial burden on existing residents.

Scheduled for decision on November 21, the bill under consideration by the City Council, spearheaded by Councilmembers Lisa Herbold and Alex Pedersen, does not immediately enact transportation impact fees. Instead, it seeks to amend the Seattle Comprehensive Plan, outlining the potential implementation of impact fees if the mayor and City Council opt to adopt them in the future. These fees would contribute to financing essential transportation projects such as sidewalks, bridge safety, and bike lanes, with developers bearing the financial responsibility. Notably, certain facilities, including low-income housing and daycares, might be eligible for exemptions.

A council staff presentation earlier this year projected that the success of a transportation impact fee program would hinge on two primary factors: the fee levels established by the city and the rate of residential growth. If Seattle aligns its rates with other Western Washington cities and experiences growth akin to previous years, such a program could generate between $200 million to $760 million over a decade. With the impending levy renewal, these fees could significantly alleviate the potential property tax burden on Seattle residents.

Several cities in the region, from Sammamish to SeaTac, including Bellevue, North Bend, and Renton, have already adopted impact fees. The argument against implementing transportation impact fees in Seattle often revolves around concerns that it might escalate housing costs or impede new development. However, dismissing all housing regulations and allowing unrestricted development is not a viable solution. Instead, imposing reasonable fees stands as a balanced approach to ensuring that the community impacts of new housing are not disproportionately borne by those who receive minimal or no benefit from such growth—namely, homeowners and renters who currently shoulder property taxes.

Despite sporadic discussions on transportation impact fees since 2014, and even earlier debates dating back to the late 1990s, the time for decisive action is long overdue. Approving the legislation put forth by Herbold and Pedersen is a crucial step toward creating a sustainable and equitable framework for Seattle's future growth.

In conclusion, the proposal advocating for the implementation of transportation impact fees in Seattle emerges as a practical and equitable solution to address the challenges posed by the city's ongoing growth. The fundamental concept that growth should financially support its own infrastructure needs is a guiding principle that could lead to a more sustainable and balanced urban development.

The pending decision by the City Council on November 21, spurred by Councilmembers Lisa Herbold and Alex Pedersen, signifies a critical juncture in Seattle's urban planning trajectory. The proposed legislation doesn't immediately enforce impact fees but lays the groundwork for their potential adoption in the future. This measured approach reflects a nuanced understanding of the delicate balance required in managing growth—ensuring that development contributes meaningfully to the community without disproportionately burdening existing residents.

The financial implications are significant, with the projected revenue from a well-structured impact fee program potentially reaching hundreds of millions of dollars over a decade. As Seattle contemplates the renewal of a substantial transportation property tax levy, these impact fees could serve as a crucial means to alleviate the burden on residents and distribute the costs more equitably among those who benefit from the city's growth.

While concerns about potential impacts on housing costs and development have been raised, the proposal emphasizes the need for a balanced approach. It rejects the extreme notion of abolishing all housing regulations and instead advocates for reasonable fees to ensure that the broader community shares in the responsibilities and benefits of urban development.

In light of prolonged deliberations on this matter since the early 1990s, the time for decisive action has arrived. Approving the legislation presented by Herbold and Pedersen stands as a pragmatic step forward, signaling a commitment to a sustainable and inclusive urban future for Seattle—one where growth not only enriches the cityscape but also supports the well-being of its diverse residents.